EA CEO Andrew Wilson has turned around on his opinion on the Microsoft – Activision deal.
Earlier this year, Andrew stated that they were mostly indifferent on the deal. Activision is, of course, one of EA’s biggest rivals. They had once directly competed with Activision, with the market competition between Battlefield and Call of Duty. EA had once leaned on that competition, but since Battlefield had fallen behind on Call of Duty, they had leaned on other games.
This is what Andrew said at the time:
“What I would say is, I don’t know what’s going to happen with Activision and Microsoft. Again, we continue to be Microsoft’s biggest partner… I think we’re the number one publisher on their platform. So whether that deal goes through or not is not really material to us, broadly.”
Today, as reported by Tech4Gamers, this is what Andrew has to say about the deal:
“I think Microsoft-Activision is a great thing. It means one of the world’s largest companies is going to invest in our industry, help us grow the industry over time.”
But this quote shouldn’t actually be taken in isolation, but understand in the context of Andrew’s full message. Andrew is both optimistic about the video game industry as a whole, and in EA’s position in that industry.
As he reveals in this CNBC interview, Andrew had read a prediction that the video game industry would reach $ 300 billion in revenue by 2030. His argument is that video games are such a big boat that competitors like EA, Activision, and others aren’t fiercely competing to dominate a smaller market like before.
Rather, the opportunities for the industry are still expanding, and subsequently, game companies like EA and Activision benefit from seeing each other grow, since new Activision gamers could also become EA gamers.
Andrew was also clear that EA was very profitable and successful as an independent company. He didn’t tip his hand if EA was open to mergers and acquisitions themselves, like Activision Blizzard King.
We don’t know if Andrew and EA stockholders would take such a deal and for how much it would take. But Andrew is sending the very strong message that they don’t even need to do such mergers in 2023.
Of course, it needs pointing out here that EA themselves were guilty of making a lot of acquisitions and attempting consolidation themselves. Through the years, EA had bought our companies like Maxis, Origin, DICE, Westwood Studios.
But perhaps that history should also give us pause and consider what that suggests how this current consolidation run ends. Yes, EA is now a large company with a lot of capital and game studios.
But that consolidation would go on to be made obsolete. Other game companies would go on to themselves be successful and emerge as rivals of EA. Many of those rivals also attempted consolidation.
Today these IP rich companies aren’t really able to monetize all the IPs they own, further neutralizing the assumed opportunity they had to dominate. Perhaps, as Andrew believes, they will just keep growing and acquiring in the future.
